PAL to post profit with surcharge approval

MANILA, Philippines — Flag carrier Philippine Airlines (PAL) expects to make modest profit this year, but the inability to recover costs from higher fuel prices may mean ending the year with a loss again.

PAL president and chief operating officer Jaime Bautista said the flag carrier expects to end the year with modest profit to be driven by higher load factor.

PAL, which carried 14.5 million passengers last year, has set a target to serve 17 million passengers this year.

Bautista said the continued increase in fuel prices, however, would take a toll on operations.

“We have reduced our projected profit because the price of fuel has gone up. If price of fuel continues to go up, and we are not able to pass on additional cost to passengers, we may again report a loss,” he said.

PAL had a comprehensive net loss of $129 million last year, a reversal of the $86 million profit in 2016 as expenses rose sharply due to higher fuel costs and the cost of acquiring and maintaining additional aircraft.

PAL’s parent firm PAL Holdings Inc. ended last year with a net loss of P6.47 billion from a net income of P4.93 billion in 2016 amid higher expenses.

Bautista said the approval of the carrier’s petition to impose fuel surcharge would be crucial in achieving profit this year.

“That is why the fuel surcharge is really needed,” he said.

Last December, PAL filed a petition with the Civil Aeronautics Board to impose fuel surcharge worth P51 to P207 to recover the higher costs of fuel. As the price of fuel has gone up by $13 from January to April, Bautista said PAL would be updating the figure and amending its petition.